Taxing motorways to finance rail infrastructure? SNCF CEO says yes
To finance the 100-billion-euro plan announced last month by French Prime Minister Elisabeth Borne, SNCF CEO Jean-Pierre Farandou insists that “all accessible sources of funding must be used”. He even proposes taxing motorways and airports to finance the more environmentally responsible train.
Speaking to the Finance Committee on 12 April 2023, Mr Farandou is the first SNCF CEO to do so since 2013. The reason? To discuss the “100-billion-euro plan” announced by the government in response to the Conseil d’Orientation des Infrastructures (COI) report, published on 24 February 2023. This plan puts an emphasis on rail, promising 100 billion to the sector by 2040. “100 billion is the amount that has been invested in 40 years to provide our country with our high-speed rail network. (…) The 100 billion euros we are talking about now, must be invested in the next 20 years,” said Farandou.
Funding this ambitious plan
The central question of financing this ambitious plan indeed remains. Farandou describes the plan as “financeable and achievable” provided that “all present and future sources of funding are used.” Indeed, although the SNCF’s turnover reached 41.4 billion euros in 2022, which is a 20 percent increase over the previous year, the company obviously cannot finance the plan alone. Moreover, Farandou considers debt a “red line” that must not be crossed. As such, the State, local authorities and the EU must all be involved.
In addition to the new European taxes on carbon quotas, Farandou also mentions taxes on the types of transport that have a “more negative impact on the environment”. He mentions in particular “air transport, I’m thinking of heavy goods vehicles, and we also have motorways which are an important source of funding (…) Part of the motorway windfall could be used to fund the railways. It remains to be seen whether these less traditional measures will be implemented by the various parties.
Underfunding identified
Significant underfunding has indeed been identified by the IOC report, particularly in relation to the regeneration and modernisation of the rail network. Farandou confirms that “The 100 billion euro plan by 2040 will first of all allow France to catch up. We were behind in the rehabilitation of the French rail network.” In France, more than a third of the network of classic lines, or some 6,600 kilometres of lines, are likely to be in a state of disrepair by 2040, without additional resources. “The average age of rail infrastructure in France is 30 years, whereas in Germany it is 17 years and in Switzerland it’s 15 years,” Farandou said. The additional resources promised by the State are therefore essential to preserving the French network.
Beyond merely ‘catching up’, the deployment of the ERTMS system is ongoing across the European Union (EU), and France will have to spend 500 billion a year to “equip the network with centralised control,” warns Farandou. The extension of the network and services can then be further addressed. Farandou specifically mentions the planned collaboration between the SNCF and Grand Paris Express, which aims to create “metropolitan RERs” and thus ensure service to a dozen metropolitan city centres “at quarter-hourly intervals.” However, he also pleads for “a unified national rail network, which must not be broken up by local initiatives. It is absolutely necessary to preserve the railway unity of our national rail network.”
Environmental urgency
The rail investment is part of the “Green France” plan to achieve targets set by the European Green Deal: reducing emissions by 55 per cent by 2030. Indeed, “the train is energy efficient,” explains Farandou: the TGV consumes 10 times less energy than the car. Farandou was invited “in the context of the ecological emergency,” explained NUPES deputy Christine Arrighi. Indeed, while the transport sector accounts for 31 percent of emissions in 2019, the train, which represents 10 percent of the French modal share, emitted only 0.3 percent of greenhouse gas emissions in France that year.
“The train is the solution to the dual requirement of increased mobility and an accelerated climate and energy transition, without sacrificing our well-being, the competitiveness of our economy or the sound management of our public finances,” insists Farandou. He also describes the ‘100 billion plan’ as “vital for the French people because it is part of the solution to the climate, energy and territorial problems facing our country.
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